## Facts

- In February 1996, Greg Hensley and Tanya Hensley (later Tanya Hensley-O’Neal) executed a document titled “First Option to Purchase Real Estate” concerning Greg’s real property in Missouri.
- The document functioned as a right of first refusal (a preemptive right): if and when Greg decided to sell, Tanya had the first right to purchase on the terms set by the seller at that time.
- The agreement stated that it was binding on the “executors, administrators, heirs, successors and assigns” of both the seller and the purchaser, and it contained no express time limit.
- In June 2000, Greg gave Metropolitan National Bank a deed of trust on the property as collateral for a loan.
- After Greg defaulted, the bank foreclosed and purchased the property at a trustee’s sale in August 2002 for $87,750.
- The bank later offered to sell the property to Tanya in August 2002 for $87,750; she did not complete a purchase then.
- In 2008, the bank agreed to sell the property to a third party.
- Tanya sued the bank seeking specific performance of the 1996 contract, claiming the bank had to honor her right of first refusal before selling to someone else.
- The trial court granted the bank summary judgment, ruling the right of first refusal was void under the rule against perpetuities.
- Tanya appealed.

## Issues

1. Whether the 1996 right of first refusal, made binding on the parties’ “executors, administrators, heirs, successors and assigns” and lacking any time limit, was void under Missouri’s common-law rule against perpetuities.
2. Whether the bank was entitled to summary judgment as a matter of law on the ground that the asserted preemptive right was invalid and unenforceable.

## Decision

- The Missouri Court of Appeals (Southern District) affirmed the summary judgment for Metropolitan National Bank.
- The court treated the “First Option to Purchase Real Estate” as a preemptive right/right of first refusal creating a contingent future interest.
- Because the agreement was drafted to bind heirs, successors, and assigns on both sides and contained no temporal limitation, the right could vest, if at all, beyond the perpetuities period (lives in being plus 21 years).
- As a result, the preemptive right violated the rule against perpetuities and was void and unenforceable.
- Given the invalidity of the claimed right, the bank was entitled to judgment as a matter of law, and Tanya’s arguments about whether a prior offer properly triggered the right did not change the outcome.

## Legal Principles

- A right of first refusal (preemptive right) in real estate is a contingent future interest and is subject to Missouri’s common-law rule against perpetuities.
- Under the rule against perpetuities, a future interest is void unless it must vest, if at all, within 21 years after some life in being at the creation of the interest.
- A right of first refusal drafted to run with the land—binding “executors, administrators, heirs, successors and assigns”—and lacking any limiting duration may remain effective indefinitely and therefore can violate the rule against perpetuities.
- When the material facts are undisputed and the only question is whether the claimed property interest is legally valid, summary judgment is proper.

## Conclusion

The Missouri Court of Appeals held that Tanya Hensley-O’Neal’s successor-binding, unlimited right of first refusal violated the rule against perpetuities and was void, so Metropolitan National Bank had no duty to offer her the property before selling it and was entitled to summary judgment.


Hensley-O'Neal v. Metropolitan National Bank, 297 S.W.3d 610 (2009)